Lite-On IT reportedly lands Acer order for one million slim-type drives

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Lite-On IT has announced landing orders from Acer for one million slim-type combo drives, according to the Chinese-language Economics Daily News. Michael Gong, general manager of the company’s optical disc drive business unit, said the company will begin volume production in the first quarter and estimated monthly output of over 800,000 units in the second quarter.

The company has quoted a price of US$90 per drive, Gong said. The price will continue to drop at the rate of US$5-10 a quarter this year. By the end of the year, it will come to sub-US$70, reducing Lite-On IT’s gross margin on the product to about 10% from above 30% currently, Gong estimated.

Slim-type drives are only used in notebook computers, and combo refers to combination CD-RW/DVD-ROM drives.

Separately, the company will also supply one million slim-type drives to its parent company Lite-On Technology. Lite-On IT targets shipping five million slim-type drives this year.

It is estimated that the two orders will contribute NT$6.3 billion in revenues, representing 12.6% of the company’s targeted NT$50 billion in full-year sales.

The company finished 2002 with impressive 56.5% year-on-year revenue growth and estimated net profits of NT$5 billion. It expects revenues to grow at least 20% this year, according to Gong.

Gong told DigiTimes in December that due to falling prices of CD-ROM, CD-RW and DVD-ROM drives, the company will accelerate its switch to penetrating the slim-type and desktop combo drive markets in 2003.